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Grayfly
16th Jan 2018, 07:34
I regularly read about the desire to bring public sector projects back 'in-house'. The collapse of Carillion is adding fuel to that particular desire.

Up until the early 1990's, the Government Property portfolio was looked after by the Property Services Agency (PSA) which was sold off to the private sector. I say sold off loosely as I believe an incentive was included in the deal. Ironically, the design arm of the PSA ended up within Carillion and was alive and well until a few days ago.

So where exactly would 'in-house' be and what would it look like? The Government as a project manager doesn't fill me with confidence. I worked with the PSA in the early part of my construction career. The answer to budgets and programmes not being met was simple in those days, just add more money and extend the programme.

Eclectic
16th Jan 2018, 08:01
Everything that government does it does badly. So the less government we have, the better.
The free market is vastly more efficient and more effective. Both parties benefiting from every transaction.

We need some government, to provide us with services we cannot provide ourselves, such as defence and policing. But very much of what government does it should not be doing, it is just our elected politicians grabbing ever more power for themselves.

The real problem is when government interfaces with the market. This is where spectacular amounts of our money get wasted. Corporatism, clientism, cronyism, corruption and freemasonry are rife. Just look at MOD procurement to see the profligate waste of money that we have worked to earn.

The real answer is far, far less government. We have a government designed to run an empire, this was rapidly expanded in WW2 to micromanage everything then further expanded by Attlee as he attempted to force the evil of socialism on us. It has never been pruned back. A good start would be to sack half of all civil servants and local government employees.

One area of immense waste and cost is rank inflation in the military. The RN has far more admirals than it has ships, in WW2 planes were often flown by NCOs, now Squadron Leader seems to be the minimum rank. Other countries, USA for instance, manage with far fewer officers and vastly fewer senior officers. A sharp cull is needed here.

ATNotts
16th Jan 2018, 08:10
It's difficult to know what the answer is. Nationalisation, and anything run by governments and local authorities have a track record of being inefficient, whether they be the railways or the NHS.

However unfettered capitalism, without sufficient regulation, where contracts are let on the basis of price rather than value for money, and corporations are permitted to become multifaceted, and therefore almost "too big / important to fail" also doesn't appear to be the answer.

One thing I think is certain. Every Carrilion type corporate failure plays directly into the hands of Corbyn's left wing agenda, and unless the government begins to regulate with a somewhat heavier touch, and stops leaving everything to "the market" we'll wind up with a left wing Labour government at the next election, and a return to the mantra of nationalisation, which will be that much easier to carry out when we've left the EU.

It's important to remember that many millions of voters today, and even more by 2022, never lived through the 1960s and 1970s and have no recall of the dismal state of the UK back then, whereas most of us on here remember it as though it was yesterday. These younger voters will be easily won over by promises of a nationalised utopia.

ExXB
16th Jan 2018, 08:40
But Carrillon was also out-sourcing much of their work. Another level between the buyer and the producer, with large executive bonuses to be satisfied. Hard to say if taxpayers got additional value for their money here, but in hindsight I’d say no.

Now the government likely will have to step in to prevent the independent suppliers from going bankrupt with further job losses. And the execs get to keep their jobs until October at full pay and benefits. IMHO some of them should be going to jail. I’d recommend at hard labour digging outhouses.

Grayfly
16th Jan 2018, 09:16
But Carillon was also out-sourcing much of their work.


The gold standard for risk management. Pass the risk to someone else, usually someone who is not in a position to manage that risk. Then add 120 days to get paid. This is one of the many privileges of being allowed on to the supply chain for companies of this type.

VP959
16th Jan 2018, 10:33
The subject of whether privatisation gains better value for money is not an easy one to look at and reach a straightforward answer.

At one extreme you could look back at the very inefficient way many public services were run in the distant past, where there was a very strong absence of personal accountability for bringing projects or services in on time and to budget.

At the other extreme you could look at the partial cost (not whole life cost) of many of the privatised projects and services, and conclude that a lot of money had been saved.

The truth lies somewhere in the middle, but there is one inescapable fact. If the public sector was to manage projects or services with the same level of cost efficiency and accountability that the private sector have, then it would save the taxpayer money. The reason is simple, there would be no requirement to make a profit or satisfy the needs of shareholders to withdraw a dividend.

The fly in the ointment is that the public sector has never been able to either get it's head around operating like a business, or attract the right calibre of staff to operate such an enterprise. I have direct experience of spending some years working within public sector Trading Funds, that supposedly operate like private companies, with a high degree of accountability, both overall and at the individual staff level, and with pay systems that are tied to their performance, rather than be a part of the normal Civil Service pay structure. Undoubtedly some Trading Funds, given the freedom to do so, can make very significant operating cost savings, but being government owned, there is a strong tendency for any investment funds they build up to replace old equipment or introduce more cost effective ways of working, will be "robbed" by the Treasury, so preventing them from working as planned and making them reliant on government hand-outs yet again.

My personal view is that, in a perfect world, the government could run projects and services as cost efficiently as the private sector. However, government is far from perfect and there are a lot of vested interests and pressure groups that would ensure that the public sector run elements would always be more expensive, even allowing for the profit element in private sector costs.

PDR1
16th Jan 2018, 11:26
Other countries, USA for instance, manage with far fewer officers and vastly fewer senior officers. A sharp cull is needed here.

Such statements are often made, but they don't stand scrutiny.

From openly available sources it is quick and easy to establish that of the US Military's "Total End Strength" (~470,000 people) 16.25% are officers of any rank, and 2.8% are O-5 (Lt.Col) or above. This includes 11 O-10s (why does a four-service armed force need 11 heads of service?)

The equivilent for the UK is (from the 2015 data) a total military strength of ~154,000 has 17.4% as officers of any rank of whom only 1.05% are O-5 or above. The UK forces have *no* O-10s and only eight O-9s (5 army, two RAF, one RN and no RMs). So the UK forces have much MORE of a bias towards the more junior "working level" officers (Major/WCdr/Cdr).

So I really struggle to see this evedence for the US force seniors doing more with less...

PDR

PDR1
16th Jan 2018, 11:50
But Carrillon was also out-sourcing much of their work. Another level between the buyer and the producer, with large executive bonuses to be satisfied.

Oh tommyrot!

In any large job the large companies that have the financial wherewithall to accept the liquidated damages risks subcontract specific areas to smaller companies which have the particular expertise/capability but aren't large enough to take on these large business risks. My own company makes aeroplanes. But we don't make undercarriages - we sub them out to a specialist. We don't make engines either. Even with the airframes we do make/buy assessments because it may not make business sense to tool-up to make something which another company can actually make cheaper (we never turned our own rivits or rolled our own bolts either). This isn't a new thing - lancaster mainspars were rolled in a steelworks, not in Avro's own factory.

Of course in the case of public sector contracts this was actually a bidding requirement and the government forced it to ridiculous extremes. When Dave Camoron came to office he had wet dreams about brigades of "SMEs" (small to medium-sized enterpises) being the nation's econimic saviour, so while they let contracts to the big guys so they could impose punative non-performance penalties the bidding rules actually required the maximum involvement (by way of subcontracting) of SMEs, with the idea that the "big guys" would still carry the can if they failed.

Of course the bug guys weren't stupid, and they were also under legal obligations to their shareholders when it came to the prudent management of risks, so they would factor in additional risk contingency into their pricing. And the Government KNEW they were doing this because (on UK public sector contracts) the pricing is "open book" and the populated risk register is a bidding deliverable. And because we damned-well told them over and over again that this was an expensive option.

But while Camoron's wet dreams may have driven it too far the basic concept of specialist suppliers being subcontracted by primes is both well-established and perfectly sensible.

PDR

Eclectic
16th Jan 2018, 11:52
Such statements are often made, but they don't stand scrutiny.

From openly available sources it is quick and easy to establish that of the US Military's "Total End Strength" (~470,000 people) 16.25% are officers of any rank, and 2.8% are O-5 (Lt.Col) or above. This includes 11 O-10s (why does a four-service armed force need 11 heads of service?)

The equivilent for the UK is (from the 2015 data) a total military strength of ~154,000 has 17.4% as officers of any rank of whom only 1.05% are O-5 or above. The UK forces have *no* O-10s and only eight O-9s (5 army, two RAF, one RN and no RMs). So the UK forces have much MORE of a bias towards the more junior "working level" officers (Major/WCdr/Cdr).

So I really struggle to see this evedence for the US force seniors doing more with less...

PDR

"The US Army has about 300 brigadiers and generals - 100 more than the UK for an army five times the size."
Senior British army roles likely to be cut - BBC News (http://www.bbc.co.uk/news/uk-30962007)

ExXB
16th Jan 2018, 12:07
From the Beeb. Chief executive Richard Howson stepped down in July of last year after a profit warning. He had been in charge since the end of 2011.

Keith Cochrane was appointed as interim chief executive.

There has been much criticism over the size of Mr Howson's pay award in 2016 which, including bonuses, totalled £1.5m. He is also due to receive a salary until October of the this year.Can anyone explain how a CEO who ‘steps down’ is entitled to a salary for another 16 months, despite the company’s bankruptcy?

Blacksheep
16th Jan 2018, 12:33
...and what were/are the bonuses for?

A bonus is strictly a reward for exceeding a specific performance target. I wonder how the "Cult of the CEO" might change if "remuneration packages" included two-way bonus schemes? That is to say - fail to meet a performance target and the company recovers the cost from the remuneration package. Go bust and you owe the shareholders all of the salary paid since the last target was set.

As it is, old Fred the Shred sits tight in his Scottish mansion living off the the multi-million pound "compensation" he and his board awarded themselves for driving his bank into insolvency.

PDR1
16th Jan 2018, 12:42
The actual numbers for the Army (using the same 2015 data as that ancient BBC article) were 309 US army officers of O-7 and above for an army of 474,000 (0.07%), versus 61 British Army officers of O-7 and above for an army of 120,000 (0.05%).

The figure of "~200 Brigadiers and Generals" was actually the total number of O-7, O-8 and O-9 officers in all four british armed services*.

That's the trouble with actual facts rather than rants withh attached agendae...

(These data are all findable via Mr google BTW).

PDR

* 2015 numbers - British Army had 47 Brigadiers, 9 Major Generals and 5 Lieutenant Generals (no field marshals) over a cadre of 370 Cols/Lt.Cols. Royal Marines had 2 Brigadiers and three Major Generals over a total of 43 Cols/Lt Cols. RN had one Admiral, 7 vice admirals and 30 rear admirals over a cadre of 304 Commordores/Captains. The RAF had 2ACMs, 8AMs and 27AVMs over a cadre ofr 370 ACs/GpCpts. Whilst on the face of it you may feel the RN and RAFare a bit over-represented in the )-5-O-7 region it's worth remembering that they are "technoical" services where senior governance posts require high rank for things like nuclear safety, airworthiness, flying standards etc (the military's former approach of a seperate "Inspector-General Corps" having proven incapable to the task.

PDR1
16th Jan 2018, 12:48
From the Beeb. Can anyone explain how a CEO who ‘steps down’ is entitled to a salary for another 16 months, despite the company’s bankruptcy?

As you get more senior in a company it is common for them to increase your "notice period" to make it less possible for you to take sensitive information into another role (possibly with a competitor), and usually if you leave they will send you home rather than make you work your notice for the same reason. In such cases the salary is normally defined as being payable in a single lump.

It could also be that he was employed for a fixed term, and when he stood down he was contractually entitled to being paid to the end of his contract - this is very common in foixed-term contracts at all levels.

PDR

PDR1
16th Jan 2018, 12:52
...and what were/are the bonuses for?

A bonus is strictly a reward for exceeding a specific performance target. I wonder how the "Cult of the CEO" might change if "remuneration packages" included two-way bonus schemes?


Yeah, right. That must be why those commercial pilots for aiatic companies are so completely willing toi accept that their 13th month bonus payment is an optional thing with no guarantees, so we never hear THEM bitching about it do we...

PDR

VP959
16th Jan 2018, 12:57
Also worth remembering that, partly as PDR1 has pointed out, there is a disproportionate number of more senior staff (1* and above) required when an organisation scales down in overall numbers. This is because some functions just don't scale - there are many responsibilities that require 1* or above, purely for the decision making and overall responsibility involved, rather than the staff management role.

My last post is a reasonable example, I only directly managed a handful of staff, yet had financial responsibility and accountability (directly to the PAC, via my chief exec and minister). They couldn't have downgraded my post simply because of the financial cost involved.

I should add that I was paid around 1/4 of the salary that the project manager in the private sector company delivering around 1/2 of the programme was paid, too, even though I was managing the entire programme, not just his part of the job................

HEMS driver
16th Jan 2018, 14:03
Such statements are often made, but they don't stand scrutiny.

From openly available sources it is quick and easy to establish that of the US Military's "Total End Strength" (~470,000 people) 16.25% are officers of any rank, and 2.8% are O-5 (Lt.Col) or above. This includes 11 O-10s (why does a four-service armed force need 11 heads of service?)

The equivilent for the UK is (from the 2015 data) a total military strength of ~154,000 has 17.4% as officers of any rank of whom only 1.05% are O-5 or above. The UK forces have *no* O-10s and only eight O-9s (5 army, two RAF, one RN and no RMs). So the UK forces have much MORE of a bias towards the more junior "working level" officers (Major/WCdr/Cdr).

So I really struggle to see this evedence for the US force seniors doing more with less...

PDR

You are spot on regarding our (U.S.) civil service. Our government is bursting at the seams, and they spend a good part of their work days protecting their "rice bowls," when they aren't enjoying their generous national holidays/vacations, etc., all protected by unions that grease the palms of our elected elite.

We are also bursting at the seams with admirals, generals, and colonels/captains, and have far too many overseas military bases, which allows these senior officers to live the life of luxury out of view of the American taxpayer. This includes servants, cooks, luxury cars with drivers, villas, etc.

NutLoose
16th Jan 2018, 14:20
=Grayfly;

So where exactly would 'in-house' be and what would it look like? The Government as a project manager doesn't fill me with confidence. I worked with the PSA in the early part of my construction career. The answer to budgets and programmes not being met was simple in those days, just add more money and extend the programme.Personally, Services wise I think it would be better to work out what each station spends on infrastruture ( Allowing for no major rebuilding works ) just the usual day to day stuff, have an office with several people in it ( A bit like the old PSA Office) and a budget accordingly based on the Stations annual expenses for say the last 5 years, with a contingency for emergencies, then let them outsource all the work to local contractors on a as and when needs basis, some you may need full time the likes of the odd Electrician, plumber etc who could also be outside contractors. etc... monies saved could be carried over etc.

Grayfly
16th Jan 2018, 14:28
But while Camoron's wet dreams may have driven it too far the basic concept of specialist suppliers being subcontracted by primes is both well-established and perfectly sensible.
PDR

Agree, all specialist work should be subcontracted and the main contractor should be able to carry out non specialist activities.

The issue with the likes of Carillion is that as Prime Contractor, they only manage the supply chain, everything else is subcontracted out. Hence they can show massive turnover, however, very little profit to support the costly management overheads. They also have no assets to sell off.

Taking the role of Prime Contractor 'in-house' would save on that overhead and profit margin, however, will require another department to be set up. A return to the Ministry of Works :}

annakm
16th Jan 2018, 14:47
Carillion directors to be investigated - BBC News (http://www.bbc.co.uk/news/business-42703549)

Love it! Maybe the UK government needs to be investigating its own members first. After all, they’re the ones that awarded these privileged contracts.

VP959
16th Jan 2018, 15:05
Carillion directors to be investigated - BBC News (http://www.bbc.co.uk/news/business-42703549)

Love it! Maybe the UK government needs to be investigating its own members first. After all, they’re the ones that awarded these privileged contracts.

Indeed they do. When all this contracting out first started, in the early 80's, I was asked to help put together a request for tenders document to privatise some range services, that at that time were provided in-house by the RMAS.

The idea was that we could reduce the size of the public sector (our then PM's obsession) and drive down cost.

We had three tenders back from prospective bidders. All were significantly more expensive than the in-house cost. We asked advice and were told to go back to the bidders and ask for a "best and final" quote, then accept the one that came in at least 20% under the in-house bid. The new bids came back and none met the required "20% less cost" criterion.

We went back up the chain and reported this, and were told to accept the bid that came in under the in-house cost. None did.

We went back up the chain once more and reported this, to be told to award the contract to the bidder that was not more than 120% of the in-house cost. None did.

We were finally told to award the contract to the lowest bidder, irrespective of cost.

IIRC the cost was around around 40% more than we were paying for the in-house service, plus we had to bear all the pension transfer costs etc, so overall I think the cost increase by outsourcing was something over 50% more expensive.

The end result was that we ended up with a far less flexible service ( "it's not in the contract, so we're not doing it", was a common phrase) and the taxpayer was paying a lot more for it.

In some respects there's a parallel with the PFI contracts awarded later to build schools, hospitals etc. As I understand it we will end up paying a great deal more money in the end, just because it looked good in the short term for the particular political party in power, who could guess that they wouldn't be around long enough to pick up the tab.

This is pretty much apolitical, BTW, as although Thatcher started a lot of the outsourcing, the Blair/Brown years were no better.

Grayfly
16th Jan 2018, 15:27
Personally, Services wise I think it would be better to work out what each station spends on infrastruture ( Allowing for no major rebuilding works ) just the usual day to day stuff, have an office with several people in it ( A bit like the old PSA Office) and a budget accordingly based on the Stations annual expenses for say the last 5 years, with a contingency for emergencies, then let them outsource all the work to local contractors on a as and when needs basis, some you may need full time the likes of the odd Electrician, plumber etc who could also be outside contractors. etc... monies saved could be carried over etc.

Always wondered why defence base work isn't project managed and delivered by the occupier, army RAF etc. The skill set must be there? I may stand corrected but isn't that what happens in the USA with Corps Of Engineers?

PDR1
16th Jan 2018, 16:34
Also worth remembering that, partly as PDR1 has pointed out, there is a disproportionate number of more senior staff (1* and above) required when an organisation scales down in overall numbers. This is because some functions just don't scale - there are many responsibilities that require 1* or above, purely for the decision making and overall responsibility involved, rather than the staff management role.

Indeed - it is not really desireable to start reducing the number of people in a given post to fractions of a person. Well apart from DExEU, obviously. I believe the country would benefit greatly if every senior post-holder in that department
was fed through a downsizing bandsaw.

PDR

PDR1
16th Jan 2018, 16:36
Always wondered why defence base work isn't project managed and delivered by the occupier, army RAF etc. The skill set must be there?

Really? You think a station commander (a pilot by training) has the skills required to let a commercial construction or infrustructure contract? It's also far to open to abuse and patronage.

So I would respectfully disagree.

PDR

KelvinD
16th Jan 2018, 16:52
Anyone here remember the good old MPBW? They may have been tedious to deal with but the job was always done. Then, once that work was privatised, Army accommodation went down the pan.

KelvinD
16th Jan 2018, 17:02
Oops! My router went a bit silly, resulting in this being posted twice.
Sorry for that.
Anyone here remember the good old MPBW? They may have been tedious to deal with but the job was always done. Then, once that work was privatised, Army accommodation went down the pan.

Jet II
16th Jan 2018, 17:24
Anyone here remember the good old MPBW? They may have been tedious to deal with but the job was always done. Then, once that work was privatised, Army accommodation went down the pan.

Well I was in married quarters looked after by the PSA before they were privatised and they were unfit for human habitation. The MOD actually tried to give them to the local Council as Social Housing but the offer was refused due to the dire state of them after decades of Government 'care'.

Grayfly
16th Jan 2018, 17:26
Really? You think a station commander (a pilot by training) has the skills required to let a commercial construction or infrustructure contract? It's also far to open to abuse and patronage.

So I would respectfully disagree.

PDR

I certainly wouldn't expect a station commander to let and run a construction project. That would be down to others with that skill set.

The services used to have experts in all aspects of infrastructure and building. Some of the best construction designers and project managers I experienced on construction projects came out of the services. One friend and colleague was a highly qualified expert in high voltage installations thanks to his time in the Royal Engineers.

Perhaps times have changed.

So I would respectfully disagree :)

A quick look at the US Army Corp of Engineers web site suggests they could easily design, build and operate our defence sites http://www.usace.army.mil/About/Centers-of-Expertise/

BehindBlueEyes
16th Jan 2018, 17:45
UK construction industry in crisis after government mistakenly bails out Marillion (http://newsthump.com/2018/01/15/uk-construction-industry-in-crisis-after-government-mistakenly-bails-out-marillion/)

Gertrude the Wombat
16th Jan 2018, 17:57
Everything that government does it does badly.
I don't think that's right, actually. A fair amount of government Just Works ... ... ... but, guess what, there never seem to be any headlines about those bits.

tartare
16th Jan 2018, 21:24
Agree Getrude.
I smiled wryly watching the reports of Carillion's demise last night.
In the gig before this one - I worked for a large, publicly listed outsource provider - active in US, Canada, Chile, Philippines and `straya.
Defence, roading, electricity, mining and facilities management.
It made some god-awful balls-ups and was run on the smell of an oily rag.
The private sector stuffs things up as regularly as Government, and government isn't all bad.
Listed companies are there to make a profit - and to increase returns to shareholders.
How do they do that?
By cutting service provision in any way they can - and disguising it as efficiency.

KelvinD
16th Jan 2018, 22:15
Well I was in married quarters looked after by the PSA
But my post referred to the old MPBW.

Cpt_Pugwash
16th Jan 2018, 23:00
KD, yes, I well remember the MPBW, which became the PSA and then forced to make "efficiency" savings in preparation for privatisation, and that's when the rot set in ...

Jet II
17th Jan 2018, 01:06
But my post referred to the old MPBW.

The PSA wasn't privatised - it was still an arm of the Government (like the MPBW) so having the Government look after property isnt the answer.

Grayfly
17th Jan 2018, 06:11
From the interweb and my own experience:

PSA Projects (the branch which dealt with new building projects), was offered for sale to the private sector, and purchased by Tarmac in 1992. (Although nominally a sale, the transaction was eventually estimated by the National Audit Office to have cost the government £81.3 million). From October 1993 it traded as TBV Consult, later being renamed TPS Consult in 1997, and becoming part of Carillion in a demerger in 1999.

Pontius Navigator
17th Jan 2018, 07:27
Ah, but the Airfield Construction Branch which reduced to the Air Ministry Works Directorate (Works and Bricks) that was subsumed into MPBW (Bricks and Works - they hated that with a vengeance) before becoming DOE (Destroyers of Everything) who spawned PSA (Portacabins stuck anywhere).

When PSA folded they also took all the base infrastructure plans with them. We had DC(RE) surveying and detecting everything on base reconstructing the plans for Defence Estates (Dispose Everything).

That latter move put all the land, and I think buildings thereon) under one purple organization, with which Green, Navy and Blue had to deal. Of course married quarters were flogged off one way and maintenance another. In the process I think transparency went out the window.

Grayfly
17th Jan 2018, 07:36
I always thought Yes Minister was a comedy programme on TV. Turns out it was a documentary.

VP959
17th Jan 2018, 07:49
I always thought Yes Minister was a comedy programme on TV. Turns out it was a documentary.

At the time many thought it was just a bit too accurate a portrayal of the inner workings of government, to the point where some suspected that some insider information was being leaked, IIRC.

It was of its time, though, as by the time I retired things were very different, for a host of reasons, but largely because a new generation of SCS had taken over, many fast-tracked into their posts as exceptional graduates, and who didn't have time to inherit the devious ways of the "Sir Humphreys".

Whether that was an improvement of not I don't know, because I certainly witnessed a fair bit of badly run government in some departments, often as a consequence of maverick ministers pursuing their own political aims, rather than putting their responsibility for the function of their department first.

Dr Jekyll
17th Jan 2018, 19:24
Agree Getrude.
I smiled wryly watching the reports of Carillion's demise last night.
In the gig before this one - I worked for a large, publicly listed outsource provider - active in US, Canada, Chile, Philippines and `straya.
Defence, roading, electricity, mining and facilities management.
It made some god-awful balls-ups and was run on the smell of an oily rag.
The private sector stuffs things up as regularly as Government, and government isn't all bad.
Listed companies are there to make a profit - and to increase returns to shareholders.
How do they do that?
By cutting service provision in any way they can - and disguising it as efficiency.
Surely Carillion went bust precisely because they weren't making a profit.

Gertrude the Wombat
17th Jan 2018, 21:44
Surely Carillion went bust precisely because they weren't making a profit.
Possibly. But plenty of profitable companies go bust because they run out of cash.

G-CPTN
17th Jan 2018, 21:54
It has been claimed that Carillion are owed many hundreds of millions from Middle East customers.

Gertrude the Wombat
17th Jan 2018, 22:13
It has been claimed that Carillion are owed many hundreds of millions from Middle East customers.

Sounds like poor credit control on their part as well as that of their subcontractors?

G-CPTN
17th Jan 2018, 22:47
Qatar ‘owed Carillion £200m’ for World Cup building work (https://www.thetimes.co.uk/edition/news/qatar-owed-carillion-200m-for-world-cup-building-work-z9jjkd3gt).

Carillion locked in £200m row over contract to prepare Qatar for 2022 FIFA World Cup (http://www.cityam.com/274666/carillion-locked-gbp200m-row-over-contract-prepare-qatar).

HyFlyer
18th Jan 2018, 14:20
The free market is good for most things commercial in nature.

However, there are two key details that have to both be present for that system to work well. Almost always where things get screwed one or both is missing.

It has to be a 'market' and it has to be 'free' the giveaway is in the name. Free market.

By that, there needs to be a sensible means of open competition with a widespread and equitable access to both the competition and the information to compete. Barriers to entry need to be restrained. Criteria for selection rigorously adhered to and published in advance. Real penalties for failure by the market (no bail-outs).

As that is as utopian a dream as having honest politicians, then any discussion of free market contracting is just as loopy.

Blacksheep
19th Jan 2018, 12:48
So where exactly would 'in-house' be and what would it look like? When I went off to join the RAF my friend "Fitz" who only got three 'O' levels joined Stockton Corporation as an apprentice joiner. He worked for the Borough Council on building the Hardwick council estate under the overall direction of the Clerk of the Works - who didn't get a £600,000 "bonus" for finishing the job.

Many of these houses are now privately owned by "Buy-to-let" landlords.

https://picturestocktonarchive.files.wordpress.com/2006/04/t10093.jpg

Jet II
19th Jan 2018, 12:57
The Council had their own construction company?

PDR1
19th Jan 2018, 13:13
The Council had their own construction company?

No, they outsorced the actual building work and just acted as a contracting agency...

PDR

Jet II
19th Jan 2018, 13:17
No, they outsorced the actual building work and just acted as a contracting agency...

PDR

So it is not 'in house' - its just the same as we do now.

Trossie
19th Jan 2018, 16:51
I heard mention recently that the state hadn't built roads itself since Roman times, ante multos annos!

That makes sense now: 'JC' stands for 'Jeremy Caesar'!

Gertrude the Wombat
19th Jan 2018, 17:02
Many of these houses are now privately owned by "Buy-to-let" landlords.
Which, as ever, is because Labour (OK, other governments haven't necessarily helped all that much, but Labour started it) killed off all other ways of saving for your old age.

Chronus
19th Jan 2018, 19:29
Bringing public service contracts in-house means a govt minister becomes responsible. Seriously, we cannot have that sort of thing now can we. Rather pay someone £1.5 million a year to carry that sort of can, than have one of our ministers be seen carry it around in public places. I `d offer to do it but I don`t expect I`d be trusted not to spill its contents

Local Variation
19th Jan 2018, 21:40
Spent many years supplying through Carillion as a customer and some of the businesses they had like CHE and AM.

Construction and FM is cyclical, usually around a 2-3 period of subbing everything out due to perceived risk and damages to then looking at the value being subbed out and bringing it all back in house again. And round and round they go.

Margins are ridiculously tight in construction with bids won on a loss and recovered through the supply chain. :bored: So, they go into FM to win the life cycle building contracts that are healthy margin to offset install losses.

Get the mix wrong with the wrong customers and down you go. Some of the contracts they had will not be picked up by private industry due to risk.

Pontius Navigator
20th Jan 2018, 10:06
Many years ago my FiL was a painter, decorator and sign writer. While he was probably contracted to the council he soon stopped as their contract specification fell far short of his professional standards, knotting wood, primer, one or two undercoat and two top coats with sanding between. That was two or three layers of paint and time that they were prepared to pay for.

We had an extension built. When the man in white suit turned up he said "oh you used knotting". Up went the quick dry primer undercoat followed by top coat - Job done, despite the rain.

Next day all the carefully painted rain drops dried out. He was not best pleased having to return, sand everything and repaint. The value of on site oversight.

OTOH moving into a new house, first job is sanding the wood work.

ShotOne
21st Jan 2018, 15:47
“In-House”? By the government? Seriously? So where does the cash come from to recruit, and pay an army, actually many more than our army, of unsackable civil-servant bricklayers, electricians, joiners etc on final-salary pensions? That really is a lu-lu suggestion; if you’re going to try it at least put the “flat-earth” woman in charge. She might at leat get on or two houses built!

felixflyer
21st Jan 2018, 16:50
I've been hearing a lot about the Hinckley Point project recently from people working there. Apparently the unions have such a stranglehold now the work has almost ground to a halt. Workers spend hours in the canteen, start winding down at 4 and sit around until clocking off at 5, refuse to help colleagues from other disciplines to make the job run smoothly etc. All the usual stuff that happens when the union gets into a job and the workers know they are untouchable.

It is likely the contractor will overrun and overspend which will, of course, be blamed on the management. At least this project will eventually have an end date.

Should any construction work be taken 'In House' we would see this happening with no end in sight. The costs would spiral and the payoffs would become the norm. It would cost us a fortune and line the pockets of the shop stewards and union leaders.

It is no wonder they call for privatisation. It's not because they want to end high costs and golden handshakes, they just want to be the ones receiving them.

ExXB
21st Jan 2018, 18:19
felixflyer, I've just done a search for Hinckley Point +labour and the results were just some dated (2016) complaints (from a union and the Labour party) about government indecision on moving forward with enhancements etc.

Not that I doubt you, but could you point me towards some more detailed reports?

Thanks

felixflyer
22nd Jan 2018, 07:39
I doubt you will find it on the internet. I've heard it from a number of people I know that are working on the job.

ExXB
22nd Jan 2018, 15:49
Ahh, thank you for replying. If you do see some further reports please pass it on.

Blacksheep
23rd Jan 2018, 09:26
No, they outsourced the actual building work and just acted as a contracting agency...My schoolmate "Fitz" was directly employed by Stockton Corporation as an apprentice joiner, later as a journeyman. As far as I can recall both the Roseworth and Hardwick council estates were built by Stockton Corporation using their own resources. We moved from our slum into a brand new council house on the Roseworth Estate in 1954 after Dad left the Royal Navy (priority to veterans in those days, not migrants) and the roads were still being laid by Corporation workers.